Shares of doughnut-maker Krispy Kreme (NYSE: KKD [FREE Stock Trend Analysis]) tumbled early Friday after the company released disappointing earnings. For the fourth-quarter, Krispy Kreme earned $0.11 per share on revenue of $118 million. Wall Street had been expecting the company to earn $0.12 on $116 million.

Krispy Kreme raised its fiscal-year 2013 guidance to $0.53-0.57. The company had previously expected to report around $0.49-0.55, while consensus estimate called for $0.58.

Despite posting disappointing earnings, analysts at Wedbush defended the company, reiterating their Outperform rating and raising their price target to $16 from $14. Wedbush called the company's guidance “conservative” and predicted that earnings could grow by double-digits.

Benzinga called called Krispy Kreme a small cap value play ahead of the company's earnings Thursday. On paper, the company trades at a significant discount to the broader market. Its price-to-earnings ratio of roughly 6 is just a bit more than one-third of the broader S&P 500's.

But the company faces some big challenges; rival Dunkin' Brands (NASDAQ: DNKN) has expanded rapidly since it was re-IPOed about two years ago. In addition, the company might also be going against some secular headwinds: as Americans increasingly prefer healthier diets, is there any room for Krispy Kreme's doughnuts?

Shares of Krispy Kreme traded near $14 on Friday.

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